PROCUREMENT CAPACITY BUILDING:
HOW TO PUT IT IN PLACE
Dr. Clifford McCue
June 23, 2014
Trinidad
How did you get here today?
• Is there anyone in this room who decided at
an early age that you wanted to buy office
supplies for government as your chosen
profession?
• Or did you think about being a professional,
such as a lawyer, doctor, engineer, or
accountant?
How did you get here today?
From another agency
From the
private sector
Could not find a
better job
Your current
procurement
position
How did you get here today?
• How many of you have a college degree?
• How many of you have a college degree in
public procurement?
• Now the real question, how many of you
currently think that public procurement is a
worthy profession?
How is Public Procurement seen by
others?
• A clerical function.
• Focused on red-tape (rule driven)
• Stakeholders do not understand the value of
good public procurement
• Too bureaucratic
• Is not linked directly to good governance
• People who work in public procurement are
inflexible and hate their jobs.
So what is the value of good public
procurement?
• It is amazing that roughly 12 – 15% of any
nations GDP is controlled by public
procurement, yet little is done to increase the
capacity of those charged with spending
government resources.
What is the value of good
procurement?
• The profit-leverage effect:
– An organization with revenue of $100 million,
purchases of $60 million, and profit of $8 million
before tax, a 10 percent reduction in purchase
spend would result in an increase in profit of 75
percent, giving a leverage of 7.5. To achieve a
$6,000,000 increase in profit by increasing sales,
assuming the same percentage hold, might well
require an increase of $75 million in sales, or 75
percent! Which of these two options—an
increase in sales of $75 million or a reduction in
procurement costs by 10% is the better option?
Today’s Overview
1
• What is Capacity Building
in Public Procurement?
2
• How do we build
capacity?
3
• Once you get there, then
what?
WHAT IS CAPACITY
BUILDING?
What is Capacity Building?
• According to the UNDP, capacity building takes place on an
individual, institutional, and the societal level.
– Individual level - Requires the development of conditions that
allow individual participants to build and enhance existing
knowledge, skills, and abilities to perform their jobs effectively.
– Institutional level - It should not involve creating new
institutions, rather modernizing existing institutions and
supporting them in forming sound policies, organizational
structures, and effective methods of management and
revenue control.
– Societal level - Community capacity building at the societal
level should support the establishment of a more "interactive
public administration that learns equally from its actions and
from feedback it receives from the population at large."
Community capacity building must be used to develop public
administrators that are responsive and accountable.
9 Components of Capacity Building
•
•
•
•
•
•
•
•
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Performance capacity: Are the tools, money, equipment, consumables, etc. available to do the
job?
Personal capacity: Are the staff sufficiently knowledgeable, skilled and confident to perform
properly? Do they need training, experience, or motivation? Are they deficient in technical skills,
managerial skills, interpersonal skills, gender-sensitivity skills, or specific role-related skills?
Workload capacity: Are there enough staff with broad enough skills to cope with the workload?
Are job descriptions practicable? Is skill mix appropriate?
Supervisory capacity: Are there reporting and monitoring systems in place? Are there clear lines
of accountability? Can supervisors physically monitor the staff under them? Are there effective
incentives and sanctions available?
Facility capacity: Are training centers big enough, with the right staff in sufficient numbers? Are
there enough offices, workshops and warehouses to support the workload?
Support service capacity: Are there training institutions, supply organizations, building services,
administrative staff, research facilities, quality control services?
Systems capacity: Do the flows of information, money and managerial decisions function in a
timely and effective manner? Can purchases be made without lengthy delays for authorization?
Are proper filing and information systems in use?
Structural capacity: Are there decision-making forums where inter-sector discussion may occur
and decisions made, records kept and individuals called to account for non-performance?
Role capacity: This applies to individuals, to teams and to structure such as committees. Have they
been given the authority and responsibility to make the decisions essential to effective
performance, whether regarding schedules, money, staff appointments?
Source: Potter & Brough 2004
Capacity Building Framework
Potter, C., and R. Brough. 2004. Systemic Capacity Building: A Hierarchy of
Needs. Health Policy and Planning. 19(5): 336-345.
HOW DO WE BUILD
CAPACITY IN PUBLIC
PROCUREMENT?
Development Plans
Gap Analysis
Job Analysis
How to Build Capacity in Public
Procurement
Building Capacity in Public
Procurement
• Job Analysis: Is a systematic process for collecting
data on the knowledge, skills and ability to perform a
job effectively.
• Gap Analysis: Is a process which compares actual
organizational performance to expected performance
to determine whether it is meeting expectations and
using its resources effectively. Gap analysis seeks to
answer the questions "where are we?" (current state)
and "where do we want to be?" (target state).
• Development Plans: An individual development plan
(IDP) is a tool to assist employees in career and
personal development. Its primary purpose is to help
employees reach short and long-term career goals, as
well as improve current job performance.
NOW THAT WE ARE
BUILDING CAPACITY,
WHERE ARE WE HEADED?
Where is Public Procurement
Headed?
Capacity Building
Complexity
Procurement
Profession
Purchasing
Occupation
Purchasing
Job
Time
Pillars of a Profession
Body of Knowledge (BOK)
Degree Programs
A Profession
Certification and License to
Practice
Professional and Learned
Societies
Pillars of a Profession
Common Language, Best
Practices, Standards,
Research, Trends
Curriculum Adoption,
Internships
A Profession
Barriers to Entry
Professional Certifications
and Regulated Licensure
Content Management,
Networks, Shared
Knowledge, Standards Setting
Public Procurement As a Profession
Public Procurement Body of
Knowledge (PPBOK)
Public Procurement
Curriculum
Public
Procurement
Public Procurement
Professional Certifications
and Organizational
Accreditations
Associations Serving the
Public Procurement
Community
Pathways To Building The Profession
Licenses and
Certifications
Professional
and Learned
Societies
University
Degrees
PPBOK
Deliverables
Professional
Certifications and
Organizational
Accreditations
Higher Ed
Curriculum
Adoption
Practices,
Research,
Standards,
Language
Professional
Development,
Training,
Resources,
Consultancy
Benefactors
Institutions, Students,
Internship Programs,
Aspiring Managers,
Public Agencies
Professionals,
Emerging
Governments, Public
Agencies, NGOs,
Donor Funded
Organizations
PPBOK
Professionals, Emerging
Governments, Public
Agencies, NGOs, Donor
Funded Organizations,
Researchers,
Consultants
One Day!
• I can envision in the near future when a
young person decides that they want to
become a Public Procurement Professional
rather than a lawyer, engineer, accountant, or
a doctor.
QUESTIONS?